According to the Market Statsville Group (MSG), the global drug-discovery services market size is expected to grow from USD 17437.5 million in 2022 to USD 63703.30 million by 2033, at a CAGR of 12.5% from 2023 to 2033. Growing R&D expenditure in the pharmaceutical and biopharmaceutical industries, rising demand for analytical testing services, initiatives for rare disease and orphan drug research, and the high-cost in-house drug development are all creating new revenue pockets in the drug discovery services market. Stringent laws controlling drug discovery and animal use, on the other hand, are projected to restrict market expansion to some extent. Drug discovery service companies have a problem due to a scarcity of trained employees. In additional, the increase in R&D expenditure, growth in biologics, patent expiries and emerging economies coupled with inclination of major pharmaceutical companies toward outsourcing to avoid hurdles, and surge in demand for outsourcing of analytical testing & clinical trial services are the same factors that drives the growth of the drug discovery service market.
Drug discovery services are the services required for the drug development by various pharma and biotech companies. The molecular manipulation, random screening, drug metabolites, molecular designing, and serendipity are some of the common methods employed for drug development. This process comprises the identification of aspirants, production, depiction, selection, and assays for therapeutic usefulness. Once a compound has presented its value in these assessments, it will initiate the course of drug development leading to clinical trials. The drug target recognition, drug discovery selection, and drug design based on the fragment, lead compound recognition, and lead optimization form the core of drug discovery service. As whole process of developing drug results high and huge capital investment. Thus, pharma companies outsource various drug development services. Professionals and organizations involved in drug discovery use this understanding to determine disease-modifying elements (drug targets) that can be used to create remedies.
During COVID-19, the demand for drug discovery services market is accounts a tremendous growth owing to the development of vaccine and therapy to resist the infectious coronavirus disease. The outbreak of SARS-CoV-2 termed "COVID-19" has created significant demand for diagnosis and treatment across the globe, thereby rising demand for the pharmaceutical and drug discovery services. The pharmaceutical and biotechnological sector, are demanding these drug discovery services to develop vaccines and therapeutics to combat coronavirus, thus anticipated to observe an increased demand in the forthcoming years at the global level. The advent of COVID-19 has a substantial impact on the overall investment sector. While businesses across all sectors can sense the repercussions of COVID-19, the emerging pharmaceutical and biotechnology companies have witnessed to the fore both challenges and opportunities in the healthcare sector. These have resulted in considerable demand amidst the pandemic, which is leading to a significant impact on the growth of the drug discovery services market. Further, the rising healthcare expenditure across the globe is encouraging the demand for drug discovery services especially in the emerging economies. For instance, the healthcare expenditure in India has been increasing over the years and has nearly stood at 1.2% as a percentage of the GDP in Budget 2021. Besides, India’s healthcare market is expected to increase three-fold to US$ 133.44 billion by 2022. Additionally, the healthcare market in the Philippines is expected to significantly grow from US$ 15.1 billion in 2017 to almost US$ 22.1 billion by 2022, as per the Business Monitor International (2017). Thus, the exponential rise in healthcare spending in emerging economies drives the growth of the drug discovery services market post the COVID-19 scenario.
While drug development and manufacturing, analytical testing is a critical part in every step as the qualitative and quantitative results generated from validated analytical testing provide first-hand information to control and ensure the quality and safety of raw materials, intermediates, and finished products. Thus, analytical testing is also frequently outsourced for minimizing costs and save time. Factors such as growing pipelines for biological candidates, continuous outsourcing from pharmaceutical companies and increasing demand for more analytical details on drugs and process development by regulatory agencies will drive the rapid market growth. With the changing market dynamics, service providers are striving to provide analytical testing with quality, accuracy, and robustness all within tight timelines.
With a high competition era, from generics and biosimilar, drug innovators are under mounting pressure to develop and introduce new products through the pipeline faster. To accelerate this process, on one side, pharma companies continue to reorganize internal resources around core competencies while downsizing non-core programs, such as analytical capacity. On the other side, they become more inclined to engage with analytical service providers earlier in the product development phases as well as outsourcing complex and challenging projects instead of traditional routine analytical testing. This will increase the number of biologics in development, demand for biological structures as a service and the growing demand for outsourcing analytical testing and clinical trial services by various pharma companies is augmenting the growth of the market.
Regulatory agencies’ primary priority during medication approval is ensuring safety and efficacy. Although these procedures serve to assure the quality of medicines released in the market, they significantly raise the cost of medication research and the final product. This aspect can have a substantial influence on medicine adoption in price-sensitive emerging economies. Aside from that, different legislations that protect product quality (such as GMP) sometimes raise production prices. Animals are used in drug development under strict limits. Mice, rats, fish, amphibians, and reptiles are the most common animals utilized in research. Concerns about the ethical use of animals in research have prompted countries to enact animal safety and usage regulations, which poses several challenges to the smooth operation of drug discovery research. Companies have been obliged to find alternative methods to reduce animal use. Novo Nordisk, for instance, uses bio simulation, which entails using computer models to imitate human biology. However, this has not been fully implemented throughout the sector.
The technological scenario for the global drug discovery services market is positive due to the adoption of advanced technologies like imaging, automation, nanofluidics, software and assay technologies have played a important role in getting better and faster data. The automation industry introduced a new robotic platform that offers full automation of the drug discovery process. Automation has the potential to increase laboratory efficiency, lower overall attrition, and decrease costs, throughout the drug discovery value chain. Other advanced technologies such as microfluidics, robotics, and the use of artificial intelligence, combined with automated data analysis, can accelerate the drug development and approval process, thereby making therapies available to patients more quickly. Additionally, the development of micro- and nanofluidic systems for use in the drug discovery has been driven by a range of fundamental attributes that accompany miniaturization and massively parallel experimentation which results in creating a lucrative opportunistic technological advancement in the market in the forthcoming period.
The study categorizes the drug-discovery services market based on process, type, drug test and end user area at the regional and global levels.
By Drug Test Outlook (Sales, USD Billion, 2019-2033)
By End User Outlook (Sales, USD Billion, 2019-2033)
Based on the drug test, the market is bifurcated into small-molecule drugs, biologics drugs, drug discovery services market, by therapeutic area, oncology, infectious and immune system diseases, neurology, digestive system diseases, cardiovascular diseases and other therapeutic area (metabolic disorders/endocrinology, respiratory disorders, psychiatry, dermatology, ophthalmology, genitourinary, women's health, and orphan andrare diseases). The small-molecule drugs segment is expected to dominate the market share in 2022 in the global drug-discovery services market. Small molecule medications are straightforward to describe, simple, and well-defined, which has aided in their growth. Small molecule medications are far more effective and are in high demand among the general public. Because of their tiny size, small molecules may easily influence cells and give efficient therapy. The rising knowledge of the advantages of small molecule medications has aided the expansion of this market sector.
Based on the regions, the global freight procurement technology solutions market has been segmented across Europe, North America, the Middle East & Africa, Asia-Pacific and South America. North America is projected to account the highest market share in 2022. The existence of many leading biopharmaceutical and pharmaceutical businesses in this area is boosted by the presence of multiple CROs and CMOs, which promotes the expansion of the drug discovery services industry. The majority of newly discovered medications are patented in the United States. Furthermore, the expanding elderly population and increased incidence of numerous chronic illnesses in the United States are driving market expansion. It is estimated that over 60% of the US population is afflicted with one or more chronic illnesses.
The drug-discovery services market is extremely cutthroat, and significant competitors in the sector are using strategies including product launches, partnerships, acquisitions, agreements, and growth to enhance their market positions. Most sector businesses focus on increasing their operations worldwide and cultivating long-lasting partnerships.
Major key players in the global drug-discovery services market are:
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